The Future of Robotics
The world is set to look drastically different ten years from now. The coming of the second machine age is quickly bringing massive changes along with it. Much of our current workforce will be exposed to various levels of intervention and /or replacement by high level artificial intelligence (AI) systems.
There is little doubt that the workforce of tomorrow will need a different set of skills in order to know how to navigate a new world of work. Current approaches for preparing young people for the digital economy are based on teaching programming and computational thinking. However, it looks like human workers will not be replaced by automation, but rather workers will work alongside robots. If this is the case, it will be essential that human/robot teams draw on each other’s strengths.
The number of domestic household robots is set to increase to 31 million between 2016 and 2019, up from just 3,700 in 2015, according to the IFR World Robotics Report 2016. Searches for ‘Automation and Robotics’ has more than doubled over the last five years, showing an increase in global awareness, according to Google Trends.
One major driver of the growth of robotic technologies is ageing population. Developed countries, including UK and the US, Europe and Japan, are quickly becoming unbalanced – with more dependent pensioners than working population. Robots can boost productivity to make up this shortfall between those that are strain on the State and those who contribute.
Another megatrend is the high speed of technological innovation. The capacity of semiconductors has allowed the smartphone of today to be much more powerful than a personal computer of ten years ago. This is also fuelling an improvement in the capabilities of robots.
Even tech giants are looking to develop automation technology. Amazon the e-commerce company, bought a robotic warehouse system maker Kiva in 2012 – which shows the company’s enthusiasm to adopt automation technology into their delivery business.
Google also purchased a portfolio of robotics-related businesses with the goal of creating a consumer robot technology by 2020, including Schaft a Japanese start-up which developed a two-legged robot.
While developed economies are using robots to boost productivity, emerging markets are also increasingly reliant on robotic technology. South Korea has a 35-year history of designing and building robots and an annual growth rate of robot manufacturing of 21% since 2008, according to a report produced by BlackRock.
China is looking to robotics in order to meet its ambitious productivity goals, aiming to double per capita income by 2020 from its 2016 levels. Utilisation of robots in manufacturing industries would allow China to increase efficiency and to cut costs further, the report from BlackRock read.
Howie Li at ETF Securities has stated that while China is the world’s largest importer of robots, the nation’s use of industrial robots is still way behind other countries, suggesting more growth behind the story.
Investors are continuing to develop an interest in robotics. Flows into robotics ETFs and actively managed open-end funds have accelerated significantly over the last 12 months, from an estimated $5 billion to $9 billion over this period, according to Bank of America Merrill Lynch.